There's even more evidence this week of just how misguided the Bush administration's privatization of Medicare has been. Two separate reports detail how private Medicare Advantage plans, created in 2003 by a GOP-led Congress and written by insurers for insurers, have increased the cost and complexity of the program without any evidence of improving care for seniors.
In fact as we have reported,
eliminating the outrageous subsidies to private insurers reaping huge profits in MA plans would save $50 billion over the next five years and $150 billion over the next ten years. Not only would eliminating these large overpayments save billions of dollars, it would also add 18 months of solvency to Medicare's hospital insurance trust fund. MedPac, the independent group created to advise Congress, has repeatedly made the same recommendation.
The New York Times has a good summary of these latest reports' findings here
. In one study
, Marsha Gold, a senior fellow at Mathematica Policy Research says:
"Clearly, the Medicare Modernization Act (MMA) has expanded choice and the private-sector role. But it also has added to Medicare's complexity and costs and has created potential inequities, without apparent improvements in quality."
Meanwhile two analysts from the Medicare Payment Advisory Commission, Carlos Zarabozo and Scott Harrison, report
that growth in private plans had driven up costs because the government pays them 13 percent more on average than what it would spend for the same beneficiaries in traditional Medicare:
"The higher payment rates have financed what is essentially a Medicare benefit expansion for Medicare Advantage enrollees, without producing any overall savings for the Medicare program, and with increased costs borne by all beneficiaries and taxpayers."
Thankfully, the Obama administration and it's new Budget Director nominee, Peter Orszag recognize the folly of wasting billions of taxpayer dollars on these insurance industry giveaways and have signaled their interest in eliminating them